Re: [EquisMetaStock Group] Trailing stop loss

["Athena Research" <athena.investments@xxxxxxxxx>]

Hi Sashi,

Trailing stop loss is a concept to lock in profits when there is reversal in the trend in the stocks we are trading in or a sudden rise or fall in prices of stocks against our direction of trade. 

The concept is: When you buy a stock for 100 with stop loss of 97, when stock moves into the desired direction means rising.... 

Then you also keep shifting your stop loss either by same amount or by percentage. 

Suppose you buy at 100 with stop loss of 97, after a few days stock moves to 105, then keeping same point difference, you shift your stop loss from 97 to 97+5= 102 that means now your stop loss is higher than your buy price. When stock price moves to 110, you also shift your stop loss to 107. 

But from 110 if prices start to correct, then you dont shift your stop loss from 107 to lower levels but wait for stock prices to hold. If the stock stops correcting above your stop loss level(lets say 107.50), you are still in trade and when it starts to move up again, above 110, you keep shifting your stop loss and after a rally, if stock price starts to correct,you let your stop loss fire and lock in profits.

The best system for trailing stop loss I have found is Darvas Box Trailing stop losses. check www.nicolasdarvas.org and read his book for his style of managing trades and trailing stop losses. Darvas book is available online on this site free of cost.

Sometimes in high volatility markets, using percentage trailing stop losses is better choice than fixed point stop losses. 

 





Thanks and Regards,
Amit Trivedi
President & CEO
Athenasolutionz.com - "We sell hope, in the stock market."

  ----- Original Message ----- 
  From: sashikanth.reddy@xxxxxxxxx 
  To: equismetastock@xxxxxxxxxxxxxxx 
  Sent: Tuesday, October 03, 2006 12:43 AM
  Subject: [EquisMetaStock Group] Trailing stop loss


  Hi

  I have made few custom explorations for buy and sell and back tested
  them. I was able to get maximum returns when i go for trailing stop loss
  option.

  I would appreciate if some one can explian the trailing stop loss
  working methodology in MS with an example that will be of great help.

  Also is there any way i can write an exploration for the trailing stop
  loss, if so can you provide me with the code.


  I heard through metastock you can programe to buy and sell stocks
  through system. If there are any indian users doing it can you pls let
  me know the procedure for the same step by step

  thanks
  sashi

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